Spain-based Banco Bilbao Vizcaya Argentaria or BBVA’s (ES:BBVA) bid for its local competitor Banco Sabadell (ES:SAB) faces a regulatory setback, as antitrust authorities have decided to conduct a more detailed review. Spain’s antitrust regulator, Comisión Nacional de los Mercados y la Competencia (CNMC), moved the deal to a Phase 2 review yesterday. According to the Phase 2 review, CNMC now has at least three more months to evaluate the hostile bid. Following the news, BBVA stock fell 2.3% on Tuesday, while SAB was down by 1.41%.
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Sabadell and BBVA are two of the top banks in Spain, providing a full range of financial services.
Antitrust Concerns Stall BBVA’s Sabadell Takeover
The latest decision by the CNMC mandates a more thorough review and will postpone any progress on the deal. BBVA has planned to make a formal tender offer to Sabadell shareholders by the end of this year, which looks doubtful now.
BBVA first proposed a takeover bid for Sabadell in April 2024, but it was rejected. Subsequently, BBVA launched a hostile takeover attempt by directly targeting Sabadell’s shareholders. BBVA claimed that the merger would create a leading European financial institution with €1 trillion in assets and 100 million customers.
The CNMC’s latest decision will benefit Sabadell, which has strongly opposed the deal. Sabadell had previously cautioned that the regulator could impose conditions, potentially requiring BBVA to divest its highly profitable small business clients. Commenting on the decision, Sabadell stated that it highlights the complexity of BBVA’s hostile takeover bid, given its impact on competition within Spain’s financial system.
On the other hand, BBVA stated it would continue working with the Spanish competition authority to finalize the agreement and secure approval for the deal as soon as possible.
Is BBVA a Good Investment?
According to TipRanks, BBVA stock has a Strong Buy consensus rating based on four Buys and one Hold recommendation. The BBVA share price forecast is €11.71, which is 31.10% above the current price level.
